Controls still not enough to prevent another Bedway

Pittsburgh has failed to make changes that would prevent the type of fraud that Robinson businessman Art Bedway admitted on Tuesday, city officials said.

City Council President Darlene Harris said legislation she is developing would give council oversight of all contracts more than a certain amount, such as $30,000, but it has been stalled in the Ravenstahl administration for two years. She said she did not know why.

Council Budget Director Bill Urbanic said council typically votes on contracts that total in the millions of dollars but gives the mayor's office and department directors blanket approval to seek and award lesser contracts. Council sets a maximum amount on those contracts and permits the mayor's office and department heads to hash out details.

“When I was on (Pittsburgh) school board, the school board approved all contracts,” said Harris, who considered a run for mayor this year. “I believe we should be looking at contracts. That would put another set of eyes on procurement.”

Harris and other city officials said no amount of enforcement and oversight would completely stamp out contract corruption.

“If someone is intent on committing fraud, there isn't a lot you can do to stop it,” said city Controller Michael Lamb.

Bedway, 63, pleaded guilty to paying a city employee $6,000 to write specifications for his bid on a $327,000 contract for installation and maintenance of computers in police cruisers. The employee, Christine Kebr, 56, of Castle Shannon was responsible for reviewing the bids and recommending a company for the contract. Based on Kebr's recommendation, the city awarded the contract to Bedway's company in 2007. Kebr, who resigned in 2011, pleaded guilty in December to conspiracy.

According to a federal indictment, Bedway created Alpha Outfitters with a “straw” female owner so he could boost his chances of winning the contract under city rules for contracting with businesses owned by minorities and women. Lamb said he has recommended increased enforcement powers for the city's Equal Opportunity and Review Commission, which is responsible for reviewing minority contracts. He suggested that additional employee training on conduct rules would help minimize fraud.

City Council last year gave the commission the authority to levy penalties and other powers, but the lame-duck Ravenstahl administration is delaying implementation until the next mayor takes office.

Lamb said the city requires plenty of contract oversight, including a review by his office. It also has a strong ethics code for employees, he said.

Lamb said his office was tipped to the Bedway scandal in 2008 and immediately turned it over to authorities for investigation.

“It's not like it went undetected,” he said.

Henry Sciortino, executive director of the Intergovernmental Cooperation Authority, which was appointed by the state to review and approve city budgets, said new financial management software would help reduce the chance of fraud. The city has implemented part of the financial system required by the ICA and is in the process of buying more software to complete the system.

“It creates a higher level of visibility for all the kinds of financial things that go on,” Sciortino said.

Councilman Ricky Burgess said council in 2009 enacted legislation outlawing no-bid contracts worth more than $30,000. That same year, Ravenstahl issued an executive order placing more stringent controls on contracts for professional services, such as engineering and architectural work, which do not fall under state laws for competitive bidding.

“There are still things we can do,” Burgess said. “I would still like to see oversight of contracts that the city funds. Unfortunately, you can't protect from human greed and human error.”

Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.

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